Australian Medicare Levy Calculator: 2% of Taxable Income
Work out your Australian Medicare levy — the 2% of taxable income that helps fund Australia's public health system — and see your income net of the levy.
Adjust the inputs and select Calculate for a full breakdown.
Compare Common Scenarios
How the numbers shift across typical situations for this calculator:
| Scenario | Medicare levy | Income net of levy |
|---|---|---|
| 2% of $70,000 ($1,400) | 1,400 | 68,600 |
| 2% of $45,000 | 900 | 44,100 |
| 2% of $120,000 | 2,400 | 117,600 |
| 2% of $90,000 | 1,800 | 88,200 |
How This Calculator Works
Enter the Medicare levy rate (standard 2%) and your taxable income. The calculator returns the levy and your income net of it. The levy is collected through the tax system on top of your income tax, and most taxpayers pay the full 2%, though low-income earners may pay a reduced rate or be exempt.
The Formula
Percentage of an Amount
Amount is the base value, Percentage is the rate applied to it
Worked Example
At the standard 2% rate, a taxable income of $70,000 means a Medicare levy of $1,400, leaving $68,600. The Medicare levy helps fund Medicare, Australia's public healthcare scheme, and is paid in addition to your income tax. Most taxpayers pay 2% of their taxable income; those below certain low-income thresholds pay a reduced levy or none, and there are exemptions for some individuals (such as certain foreign residents or those not entitled to Medicare benefits).
Key Insight
The Medicare levy is a core part of Australia's tax system, and a few distinctions matter. The standard levy is 2% of taxable income, paid on top of income tax to help fund Medicare. This calculator shows the straightforward 2% calculation, but the real rules include a low-income reduction: below a threshold you pay nothing, and there's a phase-in range where the levy is reduced before reaching the full 2% — so low earners pay less than 2% (or zero). Crucially, the Medicare levy is different from the Medicare Levy Surcharge (MLS): the surcharge is an additional charge (typically 1%–1.5%) on higher-income earners who do not hold an appropriate level of private hospital cover, designed to encourage private health insurance and reduce demand on the public system — so high earners without private hospital cover can pay the 2% levy plus the surcharge, and for many it's cheaper to take out private hospital insurance than to pay the MLS. Exemptions from the levy exist for certain people (some foreign residents, those not eligible for Medicare, and others meeting specific criteria). For an accurate figure, your taxable income (after deductions) is the base, and you should check current thresholds and whether the surcharge applies to you. Use this to estimate the standard 2% levy; consult the ATO or a tax agent for low-income reductions, exemptions, and the surcharge.
Frequently Asked Questions
How is the Medicare levy calculated?
Multiply your taxable income by the levy rate (standard 2%). On a $70,000 taxable income, the levy is $1,400, leaving $68,600. It's paid in addition to your income tax, through the tax system.
Does everyone pay the full 2%?
Most taxpayers do, but not everyone. Below certain low-income thresholds you pay a reduced levy or none, with a phase-in range before the full 2% applies. Some individuals are also exempt (for example certain foreign residents or those not entitled to Medicare). Check current ATO thresholds for your situation.
What's the difference between the Medicare levy and the Medicare Levy Surcharge?
The Medicare levy is the standard 2% of taxable income most people pay. The Medicare Levy Surcharge (MLS) is an additional 1%–1.5% charged to higher-income earners who don't hold adequate private hospital cover — designed to encourage private insurance. They're separate; high earners without private cover can pay both.
How can I avoid the Medicare Levy Surcharge?
By taking out an appropriate level of private hospital cover if your income is above the surcharge threshold. For many higher earners, the cost of private hospital insurance is less than the surcharge they'd otherwise pay, so it can be cheaper to insure than to pay the MLS. The standard 2% levy itself generally can't be avoided.
What income is the levy based on?
Your taxable income — that's income after allowable deductions. This calculator applies the rate to the taxable income you enter. For the most accurate result, use your actual taxable income, and remember low-income reductions and exemptions can lower the levy below the standard 2%.
Related Calculators
Methodology & Review
The levy is the Medicare levy rate applied to taxable income; the remainder is income net of the levy. It models the standard 2% levy on taxable income and does not apply the low-income reduction/exemption thresholds or the separate Medicare Levy Surcharge.
Written by Ugo Candido · Last updated May 22, 2026.